Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $232,000, $319,000, and $411,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale. The cash collections in November are

Question

Business

Marina

24 September, 09:54

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $232,000, $319,000, and $411,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale. The cash collections in November are

+4

Answers (1)

Know the Answer?

Esperanza Terrell · Answer 1

Total cash collection = $322,425

Explanation:

Giving the following information:

Sales:

Septmeber = $232,000

October = $319,000

November = $411,000

The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale.

We need to determine the cash collection for November:

Cash Collection:

Sales in Cash November = 411,000*0.25 = 102,750

Sales on Account October = (319,000*0.75) * 0.7 = 167,475

Sales on Account September = (232,000*0.75) * 0.3 = 52,200

Total cash collection = $322,425